Key deal increases stakes in Canning Basin leases

keyA new sales agreement has Key Petroleum poised to acquire interest in two leases from Emerald Oil & Gas: a 24.98 per cent interest in Exploration Permit 104 (EP104) and a 14.17 per cent interest in Retention Lease 1 (RL1), both in WA’s Canning Basin.
Key Petroleum currently holds 16.44 per cent interest in the leases, which are operated by Buru Energy and contain several identified development and exploration opportunities. The consideration for the sale is $50,000 plus 4 million ordinary, fully paid shares in Key Petroleum.
The leases cover 800 square kilometres 20km northwest of Derby along the highly prospective Pinnacle Fault trend, which runs for about 225km along the northern edge of the Canning Basin. The land lies within the Lennard North Province, which is dominated by a regional dip to the southwest, interrupted by synthetic and antithetic faults bounding the Precambrian Kimberley Block to the north, setting up titled fault blocks and terraces in the deeper part of the section.
Low stand deltaic sands in the Lower Anderson Formation extend from the untested Stokes Bay-1 well to the Point Torment gas discovery in RL1 and southeast to West Lora-1 and Kora-1 in the adjoining L15 lease, in which Key Petroleum holds a 49 per cent interest.
Key Petroleum reported that there was the potential for 150 billion cubic feet of gas-in-place trapped along the trend. Key Petroleum will use the information gathered through an airborne gravity gradiometry and magnetic survey to determine its exploration plans for the leases.
West Head Lead in EP104 is interpreted to be a Devonian reef. The seismic data gathered for this lead will be reprocessed and remapped to determine if additional seismic data is required or whether the prospect can be drilled based on the available information.
While the deal is subject to standard approval by the Department of Mines and Petroleum, Key Petroleum stated that neither company could foresee any reason that the transfer of interests would not be approved. Following the
acquisition, Key Petroleum will hold 41.42 per cent interest in EP104 and 30.61 per cent interest in R1.